Crockett & Myers v. Napier, Fitzgerald & Kirby

Since the district court, on remand from a previous Ninth Circuit decision, failed to follow instructions to recalculate an award given to a party for a client’s referral value, the re-entering by the district court of their previous award was clearly erroneous.

Brian Fitzgerald (“Fitzgerald”) was awarded $33,333 by the district court in quantum meruit based on the unjust enrichment he conferred on Crockett & Meyers, LLP (“Crockett”). Fitzgerald previously appealed his award to the Ninth Circuit arguing that the award was erroneous because he referred a major client to Crockett, and the award did not account for that referral’s value. The Ninth Circuit agreed, and remanded the case back to the district court to recalculate the award to include the value of the client referral, and it re-entered its original award of $33,333. Fitzgerald again appealed to the Ninth Circuit to determine whether the award was proper. The Ninth Circuit reviewed the award for clear error and determined that the district court erred in re-entering the original award on remand since they did not follow the Ninth Circuit’s instruction to make a specific factual finding as to the value of Fitzgerald’s referral of a client whose case was enriched by Crockett. The Ninth Circuit further determined that Crockett’s custom of paying a one-third referral fee is the most “definitive indication of the value” of Fitzgerald’s referral of the case at issue, and since the recovery of the case was $500,000, the Court determined Fitzgerald should receive $166,666. Finally, the Ninth Circuit determined that the amount awarded to Fitzgerald should be reduced to the extent that Fitzgerald decreased the value of the case to Crockett, so the final award to Fitzgerald should be $100,000. VACATED and REMANDED.